Two traders charged in Sh3.9 billion fake invoice tax fraud

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Two traders, Joram Kamau Ndinguri and Dorothy Gacheri Kimathi, have been charged in a Nairobi court over an alleged Sh3.9 billion tax fraud scheme involving fake invoices linked to the Kenya Revenue Authority (KRA). 

Businessman Kamau and businesswoman Gacheri, alongside their companies, were arraigned before Milimani Magistrate Paul Mutai, where they denied the charges

Mr Ndinguri and his firm Renova Limited separately face two charges each alleging fraud in relation to tax contrary to Section 97(C) as read with Section 104(3) of the Tax Procedures Act No. 29 of 2015.

In the first count, the prosecution alleges that between March 1 and April 20, 2023, Ndinguri, as a director of Renova, made an incorrect statement by claiming input purchases amounting to Sh28,103,448 from Lanigi Enterprises, which he knew to be incorrect, thereby reducing your tax liability and occasioning the Commissioner a VAT loss of Sh4,496,552.

In the second count, relating to September 2022 fraud, he is accused of claiming purchases amounting to Sh49,050,038 from Jawari General Supplies, which he knew to be incorrect, occasioning a VAT loss of Sh7,848,006.

Together, the two charges involve purchases of about Sh77.2 million and a VAT loss of about Sh12.3 million.

Ms Gacheri and Njemter Agencies Limited are accused of committing the alleged offences between December 20, 2024 and January 20, 2025.

The charge sheet alleges they made an incorrect statement by claiming purchases that amounted to Sh2,852,672 from Aislev Enterprises, which you knew to be incorrect, thereby reducing your VAT liability and causing the KRA VAT loss of Sh456,428.

The charge sheets also name Henry Ateka Nyabwari, trading as the supplier businesses Lanigi Enterprises, Jawari General Supplies and Aislev Enterprises, who did not appear in court for plea-taking, leading to the court issuing warrants of arrest against him and his firms.

He faces counts of aiding the commission of fraud in relation to tax.

One of the counts alleges he knowingly and willfully aided Renova Limited to commit fraud in relation to tax by declaring false taxable supplies to the said Renova Limited.

The court released Ndinguri on a bond of Sh300,000 or cash bail of Sh200,000.

Ms Gacheri was released on a bond of Sh300,000 with an alternative of Sh150,000 cash bail, and two contact persons.

The accused are expected back in court on October 16, 2026, for directions on the hearing.

The accused were charged after the Office of the Director of Public Prosecutions (ODPP) approved the offences against them.

The ODPP said it had approved charges against five individuals and twelve companies linked to an alleged scheme to defraud the Government of approximately Sh3.9 billion in Value Added Tax (VAT).

KRA revealed that its investigations found that a network of companies, commonly referred to as ‘missing traders,’ was used to generate fictitious transactions and electronic tax invoices.

The invoices were allegedly used by other businesses to unlawfully claim VAT refunds or reduce their tax liability, despite no genuine purchases having been made.

The ODPP named Renova Limited, Njemtar Agencies, Jeflar Construction Company, Namtek Transporters Company Limited, Jawari General Supplies and Tekaza Investment & General Supplies among the companies involved.

KRA said 72 related entities were used to perpetrate the scheme between 2020 and 2025, transmitting 62,869 electronic invoices through its eTIMS system valued at about Sh33.83 billion.

Taxpayers who claimed to have bought from the entities declared purchases worth about Sh25.07 billion, resulting in input VAT claims of about Sh3.996 billion.

The taxman also said its probe "identified instances of internal facilitation involving KRA staff profiles, which are being subjected to appropriate internal and legal processes.”

KRA warned that businesses that knowingly use fictitious invoices are not merely beneficiaries of a tax arrangement but are also participants in tax fraud and therefore liable to criminal and civil sanctions.

The case will be mentioned on Friday, October 16, 2026, for further directions.